2024 Year-End Planning Checklist

Filling out the FAFSA as opposed to taking out private student loans is that the FAFSA takes into account your family’s financial situation, considering factors such as income, assets, and household size, which is used to calculate your Expected Family Contribution (EFC). By completing the FAFSA you may also be eligible to receive low-interest federal student loans. These loans often have more favorable terms than private loans, providing a cost-effective way to finance your education while providing flexible repayment options when the time comes.

Maximize Retirement Contributions

Maximizing your retirement contributions is one of the most effective ways to secure your financial future while taking advantage of valuable tax benefits. As the year comes to a close, review your contributions to retirement accounts such as 401(k)s, IRAs, or Roth IRAs to ensure you’re on track to meet annual limits. For 2024, consider contributing the maximum allowable amount, and don’t overlook employer matching programs—they’re essentially free money that can significantly boost your retirement savings. By prioritizing these contributions now, you can reduce your taxable income, grow your savings through compound interest, and set yourself up for a more comfortable retirement.

Plan for Estimated Taxes and Required Minimum Distributions (RMDs)

Planning for estimated taxes and required minimum distributions (RMDs) is crucial for maintaining financial stability and avoiding unexpected tax burdens in retirement. Estimated taxes are payments made to the IRS throughout the year, rather than in one lump sum at tax time, and are especially important for those with income not subject to automatic withholding, such as freelancers or retirees with investment income. Without proper planning, individuals may face penalties for underpayment. Similarly, required minimum distributions, which mandate that retirees begin withdrawing from their tax-deferred retirement accounts like IRAs and 401(k)s after reaching age 73 (depending on your year of birth), can significantly impact taxes owed. Failing to take RMDs or withdrawing too much at once can result in steep penalties and higher-than-expected tax liabilities. By planning ahead, individuals can manage their withdrawals, minimize tax exposure, and avoid penalties, ensuring a smoother financial future.

Keep in mind that the SECURE Act 2.0, passed in 2023, once again increased the age at which workers must start making withdrawals from their retirement accounts from 72 to 73, and then to age 75 in 2033. This change allows IRA owners to defer withdrawals longer to benefit from additional tax-deferred growth of their assets. In addition, the age limit for IRA contributions has been removed.

It’s important to consult with a tax expert to ensure you’re properly managing estimated taxes and required minimum distributions.

Charitable Contributions

Charitable giving is not only a great way to make a meaningful impact, but it also allows donors to reduce their taxable income by deducting eligible donations to qualified charities, potentially lowering their overall tax liability. Additionally, charitable giving is a valuable estate planning tool that helps reduce estate taxes while leaving a lasting legacy. For business owners, charitable giving can improve employee morale, foster team building, and even provide opportunities for marketing or networking. Ask your financial advisor about the potential benefits of setting up a family donor-advised fund.

Household Budget

Conducting an annual review of your spending and savings is a critical practice to ensure your budget remains aligned with your financial goals. This process is essential not only for those who are employed but also for retirees seeking to avoid overspending. Evaluating recurring expenses, such as wireless and cable bills, to identify opportunities for lower rates can be an effective way to boost savings. Additionally, reviewing the balances in both your short- and long-term savings accounts is recommended. If you find you are falling short of your goals, consider increasing your monthly contributions. Prioritize building a fully funded emergency fund before shifting focus to other savings objectives. This is also an opportune time to assess your progress in paying down debt and obtain a copy of your credit report to monitor your financial health. Once a solid savings plan is established, set new, measurable goals for the upcoming year to keep your financial strategy on track.

Review Estate Documents

Lastly, year-end is a great time to review and update estate plans to make sure you’re accounting for any life changes or other unforeseen circumstances:

• Last Will & Testament
• Trust Documents
• Beneficiary Designations
• Durable Power of Attorney
• Healthcare Proxies
• Living Wills/Advance Healthcare Directives

Regularly reviewing these documents ensures your estate plan remains current, comprehensive, and aligned with your evolving needs and priorities. Do not wait until the end of the year to sit down and review your financials. The earlier you start to plan for next year, the better off you will be.

Update Your Beneficiaries

The end of the year presents an ideal opportunity to review and update the beneficiaries on your financial accounts. If you’ve experienced significant life changes over the past year—such as marriage, the birth of a child, or retirement—it is essential to ensure your primary and contingent beneficiaries are up to date. Keep in mind that beneficiary designations on retirement accounts and life insurance policies take precedence over those listed in a will. Additionally, naming beneficiaries on investment accounts can help these assets bypass probate, ensuring a smoother transfer upon death. To further streamline the process, make sure your beneficiaries are aware of where to locate important records when the need arises.

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